(4) The financing of health care in Vermont
must be sufficient, equitable, fair, and sustainable.

(5) Built-in accountability for quality, cost, access,
and participation must be the hallmark of Vermont’s health care
system.

(6) Vermonters must be engaged, to the best of their
ability, to pursue healthy lifestyles, to focus on preventive care and wellness
efforts, and to make informed use of all health care services throughout their
lives.

Sec. 2. LEGISLATIVE PURPOSE
AND INTENT

(a) It is the intent of the
general assembly that all Vermonters receive affordable and appropriate health
care at the appropriate time and that health care costs be contained over time.
The general assembly finds that effective first steps to achieving this
purpose are the prevention and management of chronic disease and coverage of
the uninsured through catamount health, a self-insured, comprehensive benefit
plan with sliding-scale premiums. The general assembly finds that chronic care
management is one tool to contain health care costs and ensure that Vermont’s
health care system becomes sustainable.

(b) It is also the intent of the general assembly to
ensure that any reduction in the “cost shift” is returned to consumers by
slowing the rate of growth in insurance premiums. The cost shift results when
the costs of health services are inadequately paid for by public health care
programs and when individuals are unable to pay for services. Raising Medicaid
payment rates and reducing the number of uninsured will reduce the cost shift.

Sec. 3. 3 V.S.A. § 2222a is added to read:

§
2222a. HEALTH CARE SYSTEM
REFORM; QUALITY AND

AFFORDABILITY

(a) The secretary of administration,
working in collaboration with the general assembly, shall be responsible for
the coordination of health care system reform among executive branch agencies,
departments, and offices.

(b) The secretary shall ensure that those
executive branch agencies, departments, and offices responsible for the
development, improvement, and implementation of Vermont’s health care system reform do so in a
timely manner.

(c) Vermont’s health care system reform initiatives
include:

(1) The state’s chronic care infrastructure, disease prevention, and
management program contained in the “blueprint for health” established by chapter
13 of Title 18, the goal of which is to achieve a unified, comprehensive,
statewide system of care that improves the lives of Vermonters with or at risk
for chronic disease.

(2) The Vermont health information technology project.

(3) The multi-payer data collection
project.

(4) The common claims administration
project.

(5) The consumer price and quality
information system.

(6) The public health promotion programs
of the department of health and the department of disabilities, aging, and
independent living.

(7) Medicaid, the Vermont health access
plan, Dr. Dynasaur, VPharm, and Vermont Rx, established in chapter 19 of Title
33, which contain programs to provide health care coverage to elderly,
disabled, and low to middle income Vermonters.

(8) Catamount health, established in
subchapter 6 of chapter 19 of Title 33, which provides a comprehensive
benefit plan with a sliding-scale premium to uninsured Vermonters.

(d) The secretary shall report to the commission
on health care reform, the health access oversight committee, the house
committee on health care, the senate committee on health and welfare, and the governor
on or before December 1, 2006 with a five-year strategic plan for implementing
Vermont’s health care system reform initiatives, together with any
administrative or legislative recommendations. Annually, beginning January 15, 2007, the secretary shall report to the
general assembly on the progress of the reform initiatives.

(e) The secretary of administration or designee shall provide information and
testimony on the activities included in this section to any legislative
committee upon request and during adjournment to the health access oversight
committee and the commission on health care reform.

* * * Chronic Care
Infrastructure and Prevention * * *

Sec. 4. BLUEPRINT FOR HEALTH

(a) The
general assembly endorses the “blueprint for health” prevention and chronic
care management initiative as a foundation which it intends to strengthen by
broadening its scope and coordinating the initiative with other public and
private chronic care coordination and management programs.

(b) The charge
and strategic plan for the blueprint for health are codified as chapter 13 of
Title 18.

(c) The department of health shall revise the current
strategic plan for the blueprint for health and provide the revised plan to the
commission on health care reform, the health access
oversight committee, the house committee on health care, and the senate
committee on health and welfare no later than October 1, 2006. The revised strategic plan shall provide that a model for the patient
registry under the blueprint for health is fully designed no later than January
1, 2007.

(2) “Chronic
care” means health services provided by a health care professional
for an established disease that is expected to last a year or more and that
requires ongoing clinical management attempting to restore the individual to
highest function, minimize the negative effects of the disease, and prevent
disease-related complications. Examples of chronic disease include diabetes,
hypertension, cardiovascular disease, cancer, asthma, pulmonary disease,
substance abuse, mental illness, and hyperlipidemia.

(3) “Chronic care management” means a system of coordinated health care interventions and
communications for individuals with chronic disease, including significant
patient self-care efforts, systemic supports for the physician and patient
relationship, and a plan of care emphasizing prevention of complications
utilizing evidence-based practice guidelines, patient empowerment strategies,
and evaluation of clinical, humanistic, and economic outcomes on an ongoing
basis with the goal of improving overall health.

(4)
“Health care professional” means an individual, partnership,
corporation, facility, or institution licensed or certified or authorized by
law to provide professional health care services.

(5)
“Health risk assessment” means screening by a health care professional for the
purpose of assessing an individual’s health, including tests or physical exams
and a survey or other tool used to gather information about an individual’s
health, medical history, and health risk factors during a health screening.

(6)
“Patient registry” means the electronic database developed
under the blueprint for health.

§ 702. BLUEPRINT FOR
HEALTH; STRATEGIC PLAN

(a)
In coordination with the secretary of administration under section 2222a of
Title 3, the commissioner of health shall be responsible for the development
and implementation of the blueprint for health, including the five-year
strategic plan.

(b)
The commissioner shall establish an executive committee to advise the
commissioner on creating and implementing a strategic plan for the development
of the statewide system of chronic care as described under this section. The
executive committee shall engage a broad range of health care professionals who
provide services under section 2024 of Title 33, health insurance plans,
professional organizations, community and nonprofit groups, consumers,
businesses, school districts, and state and local government in developing and
implementing a five-year strategic plan.

(c)(1) The strategic plan shall include:

(A)
a description of the Vermont blueprint for health chronic care model, which
includes general, standard elements established in section 703 of this title to
be used uniformly statewide by private insurers, third party administrators,
and public programs;

(B)
a description of prevention programs and how these programs are integrated into
communities and with chronic care management;

(C)
a plan to develop and implement reimbursement systems aligned with the goal of
managing the care for individuals with or at risk for chronic disease in order
to improve outcomes and the quality of care;

(D)
the involvement of public and private groups, health care professionals,
insurers, third party administrators, associations, and firms to facilitate and
assure the sustainability of a new system of care;

(F)
the use and development of outcome measures and reporting requirements, aligned
with existing outcome measures within the agency of human services, to assess
and evaluate the system of care;

(G)
target timelines for inclusion of specific chronic diseases to be included in the
chronic care infrastructure and for statewide implementation of the blueprint
for health; and

(H)
a strategy for ensuring statewide participation no later than January 1, 2009,
in the chronic care management plan, including common outcome measures, best
practices and protocols, data reporting requirements, payment methodologies,
and other standards.

(2)
The strategic plan shall be reviewed biennially and amended as necessary to
reflect changes in priorities. Amendments to the plan shall be reported to the
general assembly in the report established under subsection (d) of this section.

(d)(1)
The commissioner of health shall report quarterly on the status of
implementation of the Vermont blueprint for health to the house committee on health
care, the senate committee on health and welfare, and the health access
oversight committee. The quarterly report shall include the number of
participating insurers, health care professionals, and patients, the progress for
achieving statewide participation in the chronic care management plan,
including the measures established under subsection (c) of this section, the
expenditures and savings for the period, and other information as requested by
the committees. At least annually, the commissioner shall report the results
of health care professional and patient satisfaction surveys. The surveys shall
be developed in collaboration with the executive committee established under
subdivision (b) of this section.

(2)
If statewide participation in the blueprint for health is not achieved by January 1, 2009, the commissioner shall recommend to the general assembly statutory
changes to create alternative measures to ensure statewide participation by
health insurers, third party administrators, and health care professionals.

§ 703. CHRONIC DISEASE PREVENTION AND CARE

MANAGEMENT; CATAMOUNT HEALTH; REQUEST FOR

PROPOSALS

(a)(1)
The secretary of administration or designee shall issue a request for
proposals no later than January 1,
2007 for health services for
individuals with chronic disease who are enrolled in Medicaid, the Vermont
health access plan, or Dr. Dynasaur and for health services for individuals
enrolled in catamount health.

(2)
With the goal of including all individuals, the secretary may initially target
the chronic care management program to certain groups of individuals to ensure
successful implementation and quality of services and to maximize cost savings.
Individuals with chronic disease who are enrolled in catamount health shall be
included in the chronic care management program upon enrollment. In the
request for proposals, the secretary may provide a time period for implementing
chronic care management to individuals currently enrolled in Medicaid, the Vermont health access plan, or Dr. Dynasaur in
order to allow sufficient time for health care professionals and the entity
administering the proposal to identify and enroll these individuals.

(3)
The secretary or designee shall
apply for a waiver or other approval from the Centers for Medicare and Medicaid
Services to include individuals who are dually eligible for Medicare and Medicaid.

(b)
The secretary shall include in the request for proposal a broad range of
chronic diseases for chronic care management.

(c)
The request for proposals shall stipulate that responses include:

(1)
a method involving the health care professional in identifying eligible
patients, including the use of the patient registry, an enrollment process which
provides incentives and strategies for maximum patient participation, and a
standard statewide health risk assessment for each individual;

(2)
the process for coordinating care among health care professionals;

(3)
the methods of increasing communication among health care professionals and
patients, including patient education, self-management, and follow‑up
plans;

(4)
the educational, wellness, and clinical management protocols and tools used by
the care management organization, including management guideline materials for
health care professionals to assist in patient-specific recommendations;

(5)
process and outcome measures to provide performance feedback for health care
professionals and information on the quality of care, including patient
satisfaction and health status outcomes;

(6)
payment methodologies which create financial incentives and rewardsfor
health care professionals to improve disease management and the quality of care,
including case management fees or pay for performance; and

(7)
payment to the care management organization which would guarantee net savings
to the state or put the care management organization’s fee at risk if the
management is not successful in reducing costs to the state.

(d)
The secretary shall review the request for proposals with the commission on health
care reform prior to issuance. The issuance of the requests for proposals is
conditioned on the approval of the commission in order to ensure that the
request meets the intent of this section and section 702 of this title.

(e)
The secretary shall ensure that the responses to the requests for proposals,
including future requests, shall comply with the Vermont
blueprint for health.

Sec. 6. CHRONIC DISEASE
PREVENTION AND CARE

MANAGEMENT; AGENCY
OF HUMAN SERVICES;

IMPLEMENTATION
PLAN

(a) No
later than January 1, 2007, the
agency of human services shall develop an implementation plan for chronic disease
prevention and care management which at minimum meets the criteria and
requirements of chapter 13 of Title 18. The agency’s implementation plan shall
be revised periodically to reflect changes to the chronic care infrastructure, disease
prevention, and management strategic plan. In addition to the chronic care
management provided under section 703 of Title 18, the agency may provide additional
care coordination services to appropriate individuals as specified in its
strategic plan. The agency shall ensure that Medicaid, Medicaid waiver programs,
and Dr. Dynasaur change the payment methodologies in order to comply with the
recommendation of the strategic plan and the request for proposals developed
under chapter 13 of Title 18. The agency shall analyze and include a
recommendation as to any waivers or waiver modifications needed to implement a
chronic care management program.

(b)
The agency shall require recertification or reapplication for Medicaid, the Vermont health
access plan, and Dr. Dynasaur only once a year.

Sec. 7. CHRONIC DISEASE PREVENTION AND CARE MANAGEMENT;

STATE EMPLOYEES

The commissioner of human resources shall include in
any request for proposals for the administration of the state employees health
benefit plans a request for a description of any chronic care management
program provided by the entity and how the program aligns with the Vermont blueprint
for health developed under section 702 of Title 18. The commissioner shall
also work with the secretary of administration or designee, and the Vermont
state employees’ association on how and when to align the state employees’
health benefit plan with the goals and statewide standards developed by the Vermont
blueprint for health in section 702 of Title 18.

* * * Medicaid Reimbursement * * *

Sec. 8.
MEDICAID REIMBURSEMENT

(a) For
fiscal year 2007, the office of Vermont health
access shall increase Medicaid reimbursement for evaluation and management
procedure codes to enhance payment for primary care services under Medicaid and
the Vermont health access plan to a level
equivalent to rates in the Medicare program. Starting in fiscal year 2008, the
office shall also align Medicaid rates to reflect the changes in reimbursement for
the chronic disease prevention and care management program provided for in chapter
13 of Title 18.

(b) In
fiscal years subsequent to 2007, Medicaid reimbursement increases to health
care professionals and hospitals under Medicaid, the Vermont health access
plan, and Dr. Dynasaur should be tied to the standards developed under the chronic
disease prevention and care management program established in section 702 of
Title 18, quality or performance measures. Prior to implementation, these
standards shall be approved by the general assembly through the appropriations
process.

Sec. 9. HOSPITAL SERVICE AREA PILOT
PROJECTS

(a) The
office of Vermont health access, in
consultation with the department of health, shall issue requests for proposals for
community pilot projects in two separate hospital service areas. The goal of
the project shall be to increase integration and collaboration among health
care professionals and community partners to coordinate the delivery of quality
health care services in an efficient manner for implementation of the blueprint
for health and catamount health.

(b) The
responses shall include:

(1) a comprehensive
evaluation process that would establish test measures to monitor improvements
and changes in access, clinical outcomes, quality, and cost‑containment;

(2) parameters
for evaluating sharing the financial risk and any savings; and

(3) developing
payment methodologies which include cost containment and realignment of
incentives.

(c) The
office shall negotiate with the applicants to determine the scope and duration
of the project. The office shall provide incentive grants of $100,000.00 to
successful applicants to be used to coordinate and enhance the effectiveness of
the pilot.

Sec. 10. VHAP PREMIUM
ADJUSTMENTS

Sec.
147(d) of No. 66 of the Acts of 2003, as amended by Sec. 129 of No. 122 of the
Acts of the 2003 Adj. Sess. (2004) and Sec. 279 of No. 71 of the Acts of 2005, is
further amended to read:

(d) VHAP,
premium-based.

* * *

(2) The
agency shall establish per individual premiums for the VHAP Uninsured program
for the following brackets of income for the VHAP group as a percentage of
federal poverty level (FPL):

(A) Income
greater than 50 percent and less than or equal to 75 percent of FPL: $11.00$7.00 per month.

(B)
Income greater than 75 percent and less than or equal to 100 percent of FPL: $39.00$25.00 per month.

(C) Income
greater than 100 percent and less than or equal to 150 percent of FPL: $50.00$33.00 per month.

(D) Income
greater than 150 percent and less than or equal to 185 percent of FPL: $75.00$49.00 per month.

Sec. 11. DR. DYNASAUR AND
SCHIP PREMIUM ADJUSTMENTS

Sec.
147(f) of No. 66 of the Acts of 2003, as amended by Sec. 280 of No. 71 of the
Acts of 2005, is amended to read:

(f)
Dr. Dynasaur and SCHIP premium changes.

(1)
The agency is authorized to amend the rules for individuals eligible for Dr.
Dynasaur under the federal Medicaid and SCHIP programs to require beneficiary
households to pay a monthly premium based on the following:

(A)
for individuals living in households whose incomes are greater than 225 percent
of FPL and less than or equal to 300 percent of FPL, and who have no other
insurance coverage: $80.00$40.00 per household per month.

(B)
for individuals living in households whose incomes are greater than 225 percent
of FPL and less than or equal to 300 percent of FPL, and who have other
insurance coverage: $40.00$20.00 per household per month.

(C)
for individuals living in households whose incomes are greater than 185 percent
of FPL and less than or equal to 225 percent of FPL: $30.00$15.00
per household per month.

* * *

* * * Private Insurance Cost Shift Reviews* * *

Sec. 12. 8 V.S.A. § 4062d is added to read:

§ 4062d. COST SHIFT REVIEW OF HEALTH INSURANCE
PREMIUMS

In connection with insurers’ rate filings made pursuant to
sections 4062, 4062b, 4515a, 4587, and 5104 of this title and any other
applicable provisions of law, the commissioner shall ensure that health
insurers appropriately account for reductions in hospital and provider charges
attributable to any increase in Medicaid or other public insurance program
reimbursements for health care providers or facilities and to a reduction in
bad debt or charity care.

Sec. 13. COST SHIFT TASK FORCE

The department of banking, insurance, securities, and health care
administration shall convene a task force of health care professionals,
insurers, hospitals, and other interested parties to determine how to ensure
that reductions in hospital and provider charges are reflected in a slower rate of growth in health insurance premiums. The task force shall make written recommendations on
statutory or administrative changes needed to ensure that a reduction in the
cost shift is reflected in health insurance premiums to the commission on
health care reform no later than December 1, 2006.

(4)
“Chronic care” means health
services provided by a health care professional for an established disease that
is expected to last a year or more and that requires ongoing clinical
management attempting to restore the individual to highest function, minimize
the negative effects of disease, and prevent disease-related complications.
Examples of chronic disease include diabetes, hypertension, cardiovascular
disease, cancer, asthma, pulmonary disease, substance abuse, mental illness,
and hyperlipidemia.

(5)
“Chronic care management” means a
system of coordinated health care interventions and communications for
individuals with chronic disease, including significant patient self-care
efforts, systemic supports for the physician and patient relationship, and a
plan of care emphasizing prevention of complications utilizing evidence-based
practice guidelines, patient empowerment strategies, and evaluation of
clinical, humanistic, and economic outcomes on an ongoing basis with the goal
of improving overall health.

(6)
“Health care professional” means an
individual, partnership, corporation, facility, or institution licensed or certified
or authorized by law to provide professional health care services.

(7)
“Health risk assessment” means
screening by a health care professional for the purpose of assessing an
individual’s health, including tests or physical examinations and a survey or
other tool used to gather information about an individual’s health, medical
history, and health risk factors during a health screening.

(8)
“Health service” means any medically necessary treatment or procedure to
maintain, diagnose, or treat an individual’s physical or mental condition,
including services ordered by a health care professional and services to assist
in activities of daily living.

(9)
“Preventive care” means health services provided by health care professionals to identify and treat asymptomatic individuals who
have developed risk factors or preclinical disease, but in whom the disease is
not clinically apparent, including immunizations and screening,
counseling, treatment, and medication determined by scientific evidence to be
effective in preventing or detecting disease.

(10)
“Primary care” means health services provided by health care professionals
specifically trained for and skilled in first-contact and continuing care for
individuals with signs, symptoms,
or health concerns, not limited by problem origin, organ system, or diagnosis,
and shall include prenatal care and the treatment of mental illness.

(11) “Uninsured” means an individual who does not
qualify for Medicare, Medicaid, the Vermont health access plan, or Dr. Dynasaur,
had no private insurance or employer-sponsored coverage that includes both
hospital and physician services within 12 months prior to the month of
application, or lost private insurance or employer-sponsored coverage during
the prior 12 months for the following reasons:

(A) the individual’s employer-sponsored coverage
ended because of:

(i) loss of employment;

(ii) death of the principal insurance policyholder;

(iii) divorce or dissolution of a civil union;

(iv) no longer qualifying as a dependent under the
plan of a parent or caretaker relative;

(v) no longer qualifying for COBRA, VIPER, or other
state continuation coverage; or

(B)
college or university-sponsored health insurance became unavailable to the
individual because the individual graduated, took a leave of absence, or
otherwise terminated studies.

(12)
“Vermont resident” means an
individual domiciled in Vermont as evidenced by an intent to maintain a
principal dwelling place in Vermont indefinitely and to return to Vermont if
temporarily absent, coupled with an act or acts consistent with that intent.

§ 2023. ELIGIBILITY

(a) An
individual shall be eligible for catamount health if the individual is an
uninsured Vermont resident. An
individual receiving Medicaid, the Vermont health
access plan, or Dr. Dynasaur within 12 months of applying for catamount health
shall not be required to wait 12 months to be eligible for catamount health. An
individual who has coverage under catamount health may purchase an insurance
policy designed to provide health services not covered by catamount health and
remain eligible.

(b) The
agency shall establish rules pursuant to chapter 25 of Title 3 on the specific
criteria to demonstrate eligibility, including criteria for and proof of
residency, income, and insurance status.

(c)
Nothing in this subchapter shall require an individual already covered by
health insurance to terminate that insurance or enroll in catamount health.

§ 2024. BENEFITS

(a)
The agency shall develop by rule pursuant to chapter 25 of Title 3 a comprehensive
benefit package of health services and chronic care management to be provided
uninsured Vermont residents under catamount health, beginning July 2, 2007. The benefits shall include primary care, preventive and
chronic care, acute episodic care, and hospital services. The benefits shall
be actuarially equivalent to the Selectcare point of service plan administered
by Cigna and offered to state employees in 2006, except that the premium and cost-sharing
amounts shall be as provided for in this subchapter.

(b) To
the extent catamount health provides coverage for any particular type of health
service or for any particular medical condition, it shall cover those health
services and conditions when provided by any type of health care professional
acting within the scope of practice authorized by law. Catamount health may
establish a term or condition that places a greater financial burden on an
individual for access to treatment by the type of health care professional only
if it is related to the efficacy or cost-effectiveness of the type of service.

(c) The agency shall ensure that catamount health will
provide a choice of services and health care professionals, contain costs over
time, include chronic care management, and improve quality of care and health
outcomes. In determining the amount, duration, and scope of benefits to be
provided under this subchapter, the agency shall consider:

(1) credible, evidence-based, scientific research and
comment by health care professionals both nationally and internationally
concerning clinical efficacy and risk;

(2) the cost-effectiveness of health services and
technology; and

(3) revenues anticipated to be available to finance catamount
health.

§ 2025. ADMINISTRATION

(a)
The agency shall contract with a third party administrator to administer catamount
health as provided for in section 703 of Title 18. For catamount health, the
agency shall include criteria for an aggressive enrollment strategy by the
administrator. The agency shall ensure that each individual receives a health
risk assessment upon enrollment in catamount health. The agency shall weigh
the costs and benefits of purchasing a reinsurance policy for catamount health
as a method of managing risk and reducing the cost of the premium amounts. The
agency may purchase reinsurance if it determines that it is

cost-effective and prudent
to do so.

(b)
In addition to the chronic disease prevention and care management payment
provisions in the request for proposals under section 703 of Title 18, the
agency shall pay for other covered health services at a level at least ten
percent greater than for levels paid under the Medicare program. If Medicare
does not pay for a service covered under the plan, the commissioner shall
establish some other payment amount for such services determined after
consultation with affected providers. Members of catamount health shall not be
billed any additional amount for health services, except as provided for as
cost sharing in section 2026 of this title.

(c)
The agency or administrator of catamount health shall make available the
necessary information, forms, and billing procedures to health care
professionals to ensure payment for health services covered under catamount
health. The agency or administrator shall use a single, uniform, simplified
form to determine eligibility for Medicaid, any Medicaid waiver program, Dr.
Dynasaur, any state‑funded pharmacy program, and catamount health to
ensure that any individual eligible for these programs has the opportunity to
enroll. The agency shall collect data necessary to evaluate catamount health,
including the individual’s reason for not having insurance, whether the
individual’s employer offers insurance, and how the individual got information
about catamount health. Receipt of this information shall not be an
eligibility requirement. The agency shall require individuals to reapply or
recertify only annually.

(d)
The agency shall structure the administration of catamount health to ensure
that individuals may transition smoothly between Medicaid, the Vermont
health access plan, Dr. Dynasaur, and catamount health. The agency may also
modify the administrative systems for Medicaid, the Vermont
health access plan, or Dr. Dynasaur to achieve this purpose.

(e)
An individual aggrieved by an adverse decision of the agency or the
administrator may grieve or appeal the decision under rules and procedures
consistent with 42 C.F.R. § 438.402.

§ 2026. COST-SHARING; WELLNESS DISCOUNT

(a)
The agency shall propose to the general assembly reasonable sliding‑scale
premiums for individuals up to 350 percent of the federal poverty level, deductibles,
co-payments, or other cost‑sharing amounts applicable to catamount health.
Individuals with incomes above 350 percent of federal poverty level shall be
charged a premium reflecting the actual cost of catamount health. Cost-sharing
amounts shall not apply to chronic care for individuals in chronic care
management or to preventive care.

(b)
For an individual who enrolls 13 months or more after the initial month of eligibility
for catamount health, premiums shall increase one percent per month for each
month thereafter when the individual was eligible for but did not enroll in catamount
health.

(c) The agency may include financial or other
incentives to encourage healthy lifestyles and patient self‑management. These
incentives shall comply with the rules developed by the department of banking,
insurance, securities, and health care administration for health promotion and disease prevention programs offered
by health insurers.

§ 2027. Catamount
Fund

(a) The catamount fund is
established in the treasury as a special fund to be a source of financing for
catamount health.

(b) Into the fund shall be
deposited:

(1) transfers of receipts
received as strategic payments under the Master Tobacco Settlement Agreement
from the tobacco litigation settlement fund as provided for in section 425a of
Title 32;

(2) 22 percent of the revenue
from the cigarette tax levied pursuant to chapter 205 of Title 32; and

(3) the proceeds from grants,
donations, contributions, taxes, and any other sources of revenue as may be
provided by statute, rule, or act of the general assembly.

(c) The fund shall be
administered pursuant to subchapter 5 of chapter 7 of Title 32, except that
interest earned on the fund and any remaining balance shall be retained in the
fund. The agency shall maintain records indicating the amount of money in the
fund at any time.

(d) All monies received by or
generated to the fund shall be used only as allowed by appropriation of the
general assembly for the administration and delivery of catamount health and
transfers to the state health care resources fund established in section 1901d
of this title.

Sec. 15. CATAMOUNT HEALTH; PREMIUMS

Subject
to amendment in the fiscal year 2008 budget, the agency of administration shall
establish individual and family premium amounts for catamount health
established in subchapter 6 of chapter 19 of Title 33. The agency shall
establish family premium amounts by income bracket based on the individual
premium amounts and the average family size. The individual premiums shall be
by income bracket as a percentage of federal poverty level (FPL):

(1)
Income less than or equal to 200 percent of FPL: $60.00 per month.

(2)
Income greater than 200 percent and less than or equal to 225 percent of FPL: $90.00
per month.

(3)
Income greater than 225 percent and less than or equal to 250 percent of
FPL: $110.00 per month.

(4)
Income greater than 250 percent and less than or equal to 275 percent of
FPL: $125.00 per month.

(5)
Income greater than 275 percent and less than or equal to 300 percent of FPL: $135.00
per month.

(6)
Income greater than 300 percent and less than or equal to 325 percent of FPL:
$150.00 per month.

(7)
Income greater than 325 percent and less than or equal to 350 percent of FPL: $170.00
per month.

(8)
Income greater than 350 percent: the actual cost of catamount health, which
for fiscal year 2008 is estimated at $310.00 per month.

Sec. 16. RULES PROCESS AND OVERSIGHT

(a) The secretary of administration or
designee shall submit any final proposed rules, developed under chapter 25 of
Title 3, required to implement this act to the commission on health care reform
established by Sec. 277c of No. 71 of the Acts of 2005 and the health access
oversight committee for consideration. The commission and committee may submit
separate recommendations, limit comment to certain provisions in the rules, or
to the extent feasible, make joint recommendations to the joint legislative
committee on administrative rules.

(b) The health access oversight committee
shall monitor the development,
implementation, and ongoing operation of catamount health established by
subchapter 6 of chapter 19 of Title 33. The agency of administration shall
submit to the committee quarterly progress reports that shall include revenue
and expenditures for catamount health for the prior months, enrollment and
projected enrollment, projected expenditures related to enrollment for the
fiscal year, and other information as requested by the committee. At least
annually, the secretary shall report the results of health care professional
and patient satisfaction surveys regarding the administration of catamount
health.

(c) The agency shall submit
annual reports on the receipts, expenditures, and balances in the catamount
fund established in section 2027 of Title 33 to the joint fiscal committee at
its September meeting.

Sec. 17. GLOBAL COMMITMENT FINANCING

To the extent feasible and allowable under
federal law, the agency of administration and human services shall finance catamount
health through the Global Commitment for Health Medicaid Section 1115 waiver.
No later than July 1, 2006, the agency shall seek a waiver amendment from the
Centers for Medicare and Medicaid Services to include catamount health in the
premium amount paid to the office of Vermont health access under Global
Commitment. The agency may require the office of Vermont health access to use
revenue from the capitation payments related to beneficiaries covered under
Global Commitment as described in Term and Condition 40 to finance some or all
of catamount health. The agency may administer catamount health in the manner
required by the Global Commitment waiver.

Sec. 17a. FUND TRANSFERS

Notwithstanding
section 2027 of Title 33, up to $10,000,000.00 of any balance remaining in the
catamount fund at the end of fiscal years 2007 and 2008 shall be transferred to
the state health care resources fund established in section 1901d of Title 33.

Sec. 17b. 32 V.S.A. § 7771
is amended to read:

§ 7771. RATE OF TAX

A tax
is imposed on all cigarettes held in this state by any person for sale or by
any person in possession of more than 10,000 cigarettes, unless such cigarettes
shall be:

(1) in
the possession of a licensed wholesale dealer;

(2) in
the course of transit and consigned to a licensed wholesale dealer or retail
dealer; or

(3)
in the possession of a retail dealer who has held the cigarettes for 24 hours
or less. Such tax shall be at the rate of 59.589.5 mills for
each cigarette, and the payment thereof to be evidenced by the affixing
of stamps to the packages containing the cigarettes, as hereinafter provided.
Any cigarette on which the tax imposed by this chapter has been paid, such
payment being evidenced by the affixing of such stamp, shall not be subject to
a further tax under this chapter. Nothing contained in this chapter shall be
construed to impose a tax on any transaction the taxation of which by this
state is prohibited by the constitution of the United States. The amount of
taxes advanced and paid by a licensed wholesale dealer or a retail dealer as
herein provided shall be added to and collected as part of the retail sale
price on the cigarettes. All taxes upon cigarettes under this chapter are
declared to be a direct tax upon the consumer at retail and shall conclusively
be presumed to be precollected for the purpose of convenience and facility
only.

Sec. 17c. 32 V.S.A. §
7814(b) is amended to read:

(b)
Cigarettes. Notwithstanding the prohibition against further tax on stamped
cigarettes under section 7771 of this title, a floor stock tax is hereby
imposed upon every dealer of cigarettes in this state who is either a
wholesaler, or a retailer who at 12:01 a.m. o’clock on July 1, 20032006,
has more than 10,000 cigarettes for retail sale in his or her possession or
control. The rate of tax shall be 1330 mills for each cigarette
in the possession or control of the wholesaler or retailer at 12:01 a.m.
o’clock on July 1, 20032006, and on which cigarette stamps have
been affixed before July 1, 20032006. A floor stock tax is also
imposed on each Vermont cigarette stamp in the possession or control of the
wholesaler at 12:01 a.m. o’clock on July 1, 20032006, and not
yet affixed to a cigarette package, and the tax shall be at the rate of 2660 cents per stamp. Each wholesaler and retailer subject to the tax
shall, on or before September 25, 2003August 25, 2006, file a
report to the commissioner in such form as the commissioner may prescribe
showing the cigarettes and stamps on hand at 12:01 a.m. o’clock on July 1, 20032006, and the amount of tax due thereon. The tax imposed by this
section shall be due and payable on or before September 25, 2003August 25, 2006,
and thereafter shall bear interest at the rate established under section 3108
of this title. In case of timely payment of the tax, the wholesaler or
retailer may deduct from the tax due two and three‑tenths of one percent
of the tax. Any cigarettes with respect to which a floor stock tax has been
imposed under this section shall not again be subject to tax under section 7771
of this title.

Sec. 17d. 32 V.S.A. § 435a(d) is added to read:

(d)
Any monies received by the state for strategic payments under the Master
Tobacco Settlement Agreement shall be transferred to the catamount fund
established in section 2027 of Title 33.

Sec. 17e. 33 V.S.A. § 1901d
is amended to read:

§ 1901d. STATE HEALTH CARE
RESOURCES FUND

(a)
The state health care resources fund is established in the treasury as a
special fund to be a source of financing health care coverage for beneficiaries
of the state health care assistance programs under the global commitment to
health care waiver approved by the Centers for Medicare and Medicaid Services
under Section 1115 of the Social Security Act.

(b)
Into the fund shall be deposited:

(1)
revenue from the cigarette and tobacco products tax established inall
revenue from the tobacco products tax and 78 percent of the revenue from the
cigarette tax levied pursuant to chapter 205 of Title 32;

(2)
revenue from health care provider assessments pursuant to subchapter 2 of
chapter 19 of this title; and

(3)
the proceeds from grants, donations, contributions, taxes, and any other
sources of revenue as may be provided by statute, rule, or act of the general
assembly.

(c)
The fund shall be administered pursuant to subchapter 5 of chapter 7 of Title
32, except that interest earned on the fund and any remaining balance shall be
retained in the fund. The agency shall maintain records indicating the amount
of money in the fund at any time.

(d)
All monies received by or generated to the fund shall be used only as allowed
by appropriation of the general assembly for the administration and delivery of
health care covered through state health care assistance programs administered
by the agency under the global commitmentGlobal Commitment
waiver.

Sec. 17f. 32 V.S.A. § 435(b) is amended to read:

(b)
The general fund shall be composed of revenues from the following sources:

The
revenue from the floor stock tax under subsection 7814(b) of Title 32 as
amended by this act shall be deposited in the catamount fund.

Sec.
17h. 32 V.S.A. § 305a is amended to read:

§
305a. OFFICIALSTATE
REVENUE ESTIMATE

On or
about January 15 and on or about July 15 of each year, and at such other times
as the emergency board or the governor deems proper, the joint fiscal office
and the secretary of administration shall provide to the emergency board their
respective estimates of state revenues in the general, transportation,
education, and health access trustcatamount, state health care
resources, and Global Commitment funds. The January revenue estimate shall
be for the current and next two succeeding fiscal years, and the July revenue
estimate shall be for the current and immediately succeeding fiscal years.
Federal fund estimates shall be provided at the same times for the current
fiscal year. Within 10 days of receipt of such estimates, the board shall
determine an official state revenue estimate for deposit in the respective
funds for the years covered by the estimates. For the purpose of revising an
official revenue estimate only, a majority of the legislative members of the
emergency board may convene a meeting of the board. The health access trust
fund estimatesecretary shall include estimated caseloads and
estimated per member per month expenditures for the current and next succeeding
fiscal years for each population category eligible for state health care
assistance programs supported by the fund.

Sec. 18. REPORTS

(a)
The agency of administration shall report to the general assembly no later than
January 15, 2009 on any changes to catamount health needed to increase
enrollment to achieve a 98 percent rate of insured Vermonters. The agency
shall consider whether mandating participation in public health care programs
and health insurance coverage is necessary to increase enrollment or whether
mandating that those who choose not to have health insurance coverage should be
required to pay some of the health care costs. The report shall include recommendations,
a discussion of the considerations, and information and data supporting the
recommendations. The department of banking, insurance, securities, and health
care administration shall complete the survey of insurance status in time
sufficient for the data to be used in the secretary’s recommendations.

(b) No later than January 15, 2009, the
agency of administration shall report to the general assembly on:

(1) the percentage of uninsured Vermonters and the
number of insured Vermonters by coverage type;

(2) an analysis of the trends of catamount health
costs and trends in the revenue sources for catamount health;

(3) the feasibility of allowing individuals who are
not uninsured and employers to buy into catamount health at full premium cost;

(4) the number of individuals enrolled in catamount
health who are eligible for employer-sponsored insurance and the per‑member
per‑month costs of these individuals;

(5) the number of individuals enrolled in any chronic
care management program which complies with the requirements in chapter 13 of
Title 18, including those covered by private insurance; and

(6) the feasibility of removing or capping the
premium increases for enrollment outside the initial enrollment period.

Sec.
19. ENROLLMENT INITIATIVES

The secretary of administration or designee and the
director of the office of Vermont health access shall engage interested groups
and parties in assisting with outreach and informational initiatives to ensure
Vermonters have information about health care coverage options provided by
Medicaid, the Vermont health access plan, Dr. Dynasaur, and catamount health.

Sec. 20. COMMISSION ON HEALTH CARE REFORM

Any
reports required by this act shall be provided to the commission on health care
reform established by Sec. 277c of No. 71 of the Acts of 2005 until the time
that the commission dissolves.

Sec. 21. APPROPRIATIONS

(a)
For fiscal year 2007, the sum of $2,900,000.00 is appropriated from the Global
Commitment fund for the increase in Medicaid rates under Sec. 8 of this act.

(b)
For fiscal year 2007, the sum of $200,000.00 is appropriated from the general
fund for the incentive grants for the hospital service area payment pilot
projects under Sec. 9 of this act.

(3)
Sec. 17b (cigarette tax rate increase) shall apply to taxable cigarettes on and
after July 1, 2006. Amendments to the provisions of 32 V.S.A. § 7771 in
H.843 (An Act Relating to Miscellaneous Tax Policy Amendments), if enacted,
shall not be repealed or amended by this act; except that the tax rates in
Secs. 17b and 17c of this act shall take effect and supersede any provisions in
H.843 affecting the rate of the cigarette tax.

(b)
Catamount health shall be implemented on July 2, 2007. The agency of administration shall make application forms available
and allow individuals to apply for the program at least 90 days prior to
implementation.